Month: June 2007

Was I WRONG, or just early?

Comment on last week’s prediction:  The long-awaited price hike to $3.19 occurred on Tuesday, June 26, which is a few days after my WRONG prediction expired.

Wednesday, June 27, 4:45 PM:  My apologies to all for the WRONG predictions of the past two weeks.  Sticking to my guns, I must have stopped at the gas station every morning last week to top off the tank.  So, let’s see if we can learn from recent price action.  Generally, when I lose the Gas Game, it is because either I don’t have a good read on the wholesale price or the Big Red retailer is behaving differently than usual.  As far as the wholesale price, I have been trying to use the AXXIS site, which provides sample wholesale prices from some Midwestern states.  The hike to $3.19 corresponds to a wholesale price of $2.42, but the AXXIS prices have been running higher than that, which has led to my price hike predictions.  $2.42 is still 15 cents higher than NYMEX prices, so Michigan wholesale prices remain a puzzle.  Then you have retailer behavior.  In Fort Wayne, prices re-set last Wednesday to $2.95.  I was in Cincinnati Monday morning and got to watch prices re-set to $2.95 there.  So, of course, Tuesday, Michigan’s new price is $3.19.  It was interesting to see every station at $3.19 from Three Rivers and north on US-131.  Ah, to be back in 2003, when there was a regular rhythm to the Game, and refiners weren’t shutting down and coming back on line with abandon.

Speedway, what are you doing?

Wow, its been a while. A few incorrect/correct/odd things going on. I called for a hike a few days ago last week, got a text message from Meijer stating prices were to go up, but then it fizzled and nothing happened!

What is going on with Speedway? They are either losing money (why would they do that NOW?) or have hedged against rising wholesale prices (which is also unlikely considering the circumstances). Speedway could be losing money to boost its public image for being the one to hike all the time, but why now, and why so late?

I’ll be on WOODTV8 at 6/630am tomorrow (Tuesday) and they will be asking me whats going on for July 4. First off, I can’t see any major changes besides the hike I’m still waiting for. I think we should be seeing $3.09-$3.15, but as “Retailer” pointed out, “we’re” all surprised that Speedway hasn’t yet hiked. Its been a long time, prices have been steadily climbing since their bottoming out a week or so ago. We are now about 15 cents higher on the wholesale market while prices continue to nosedive! What is going on? Midwest PADD is OK, its not “great”, but perhaps thats why we’re seeing a discount? Perhaps cheaper ethanol is lowering the price of a gallon? I don’t know for sure, but I AM enjoying the “cheaper” gasoline.

I am still waiting on a price hike which STILL could happen ANY day. I’ve been keeping full for a while.

I’m not exactly sure what to predict, other than prices are overdue to climb due to recent wholesale prices!! Stay full!

(I just have to toot my own horn a little, at the beginning of Spring I was quoted as saying May would be terrible but come June things should settle down to around $2.75, and here we are at $2.75! I don’t think we’ll stay here long, but we’ll see!)

~Patrick

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Same prediction as a week ago; I’ll be right this time.

Comment on last week’s prediction:  Yet, prices continued to fall through at least Tuesday the 19th, so I was WRONG.

Tuesday, June 19, 2007, 2:45 PM:  I am going to post almost the same words I posted exactly a week ago:  In past years, prices tended to go lower in June, with a minimal number of price hikes.  This year, we are thankfully seeing the same, but the month isn’t over yet.  With wholesale prices in the Midwest at about $2.40, that corresponds to a 20-cent margin price close to $3.20.  We have a good number of stations under $3.00 right now, so I sense a price re-set coming, in the $3.15-$3.19 range.  I predict this re-set will occur by the end of the week.

Prepare for hike Monday!

Finally…? Looks more likely that Grand Rapids and nationwide prices will start increasing again next week. We’ve seen a rally on the market Thursday and Friday as disappointing DOE results are starting to worry traders.

The DOE Report showed no increase in stockpiles as should have been the case, according to analysts surveyed. They were expecting a 1.5mb increase, but none even happened. Refiners dropped their utilization, even after analysts expected them to boost their numbers.

Grand Rapids to $3.19 is a likely target while the rest of the nation will start to see prices slowly rise for the most part.

Stay tuned especially Sunday night to see if the likelihood of said hike increases at all.

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